Class Action Lawsuit Sevicers and Forced Placed Insurance Carriers

As discussed at the recently concluded National P&P Conference III in Washington, D.C., a class action lawsuit has been filed against a number of servicers and forced placed insurance carriers.

Anderson et al v. Litton Loan Servicing et al (2:06 CV-0548 5) is a class action lawsuit filed on August 29, 2006 in the United States District Court for the Eastern District of Louisiana.

The Plaintiff class members are Louisiana residents who owned real estate and personal property that was destroyed or damaged when Hurricane Katrina hit the area beginning on August 29, 2005.  Defendants in the suit are insurers and mortgage lenders and servicers.  The mortgage lenders/servicers were named insureds on the forced placed policies

The complaint alleges that:

  • Plaintiffs paid their insurance premiums timely on "forced place" insurance policies to defendant insurance companies
  • Insurance company defendants' negligent, reckless and/or intentional refusal to recognize Plaintiffs as insureds and provide coverage to them for losses and damages to their property as caused by Hurricane Katrina has caused them harm
  • Plaintiffs were intentionally excluded as policy beneficiaries even though they paid their premiums timely.
  • The checks issued by the insurers were made payable exclusively to the mortgage servicers, even though Plaintiffs sought funds additional to the original amounts offered by the insurers.

In summary, the Plaintiffs allege that the insurance contracts between the insurers and the mortgage servicers obligate them to provide coverage for all loss or damage to both real and personal property within coverage limits.  Plaintiffs further allege that because the Plaintiffs paid their premiums, this breach deprived them of the benefit of their coverage.  Plaintiffs believe they should be paid more to cover their losses. 

Plaintiffs seek a declatory judgment stating the above bullet points.  They also seek monetary damages for amounts not paid under the policies, compensatory damages, punitive damages, attorney fees and interest.

To view the full lawsuit, please click on the following.

 Class Action Lawsuit.pdf

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